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Source link: http://archive.mises.org/18068/keynes-vs-hayek-debate-video/

Keynes vs Hayek Debate Video

August 13, 2011 by

Here is the full length video of the debate between Skidelsky/Weldon and Selgin/Whyte.  I’m not sure how to embed videos on this blog, so for now I will link to YouTube.


Ivan Georgiev August 13, 2011 at 2:45 pm

Every time I listen to Keynesians my head aces.

Tyrone Dell August 13, 2011 at 3:25 pm

I am so glad this is finally on Youtube.

NIkolaj August 13, 2011 at 4:36 pm

As I expected: Keynesians attack Hayek for being a liquidationist while Selgin “defends” him by saying that he was not, and that he was actually a good Keynesian or at least Fridmanite, who believed that printing money during the boost is necessary (nothing to say about the false thesis that in “Prices and Production” Hayek advocates MV stabilization. On the contrary, he explicitly rejects that as a “maxim of monetary policy”). At any rate, with the friends like this, who needs the enemies?

Jonathan M.F. Catalán August 13, 2011 at 8:30 pm

I think you’re more or less right. Too much emphasis on “maintaining spending” and insufficient attention on the fact that what matters is the use of real economic goods, not nominal “aggregate demand”. If the price level falls, but the same amount of goods are being invested, what does it matter if nominal aggregate demand has technically fallen?

Davis August 13, 2011 at 5:31 pm

Love the straw poll @9:50. What a bunch of sad drones are those keynesians.

Juraj August 13, 2011 at 7:15 pm

Would have been so much more interesting if it were Rothbard vs XYZ. Hayek looks like an inflationary socialist in this debate.

gienek August 13, 2011 at 8:25 pm

The fact that Lord Skidelsky doesn’t understand what “misallocation of resources” is speaks for itself. But then again, why would he need to if prosperity is all about increasing G?

George Selgin August 14, 2011 at 9:12 pm

Nikolaj writes: “As I expected: Keynesians attack Hayek for being a liquidationist while Selgin “defends” him by saying that he was not.”

Nikolaj has often proven himself do be an unscrupulus and dishonest commentator on this and other forums. In this case he outdoes himself. Anyone who hasn’t the patience to go through the entire video above (as Nikoloj no doubt hopes will be true for all) is invited to start at about 25:08, where Paul Mason asks me directly whether Hayek was a liquidationist. My unqualified response is that he was indeed a liquidationist. It is more or less the first thing I say of substance in the whole debate. I later go on to elaborate upon some of the things that ought to have been liquidated in the recent bust, but weren’t.

As for Hayek not having treated constant MV as consistent with monetary neutrality, here once again Nikolaj proffers a bald faced lie.

Shame on you, Nikolaj. The cause of Austrian economics isn’t advanced by liars like yourself. On the contrary: you set it back every time you make your ignorant claims on behalf of it.

NIkolaj August 15, 2011 at 1:29 pm

Dear professor Selgin,
unfortunately for you, the listeners could easily check the video and see what you actually said since 25′ 50” to about 29′.

Simply, you were “defending” Hayek from Skidelsky’s accusation for being a “luquidationist” by arguing that Hayek “changed his mind in the early 1930s”, and accepted the need to “avoid the collapse of spending” (translation – prevent the liquidation from taking place) by monetary policy of MV stabilization (printing money to offset the decreased velocity of circulation), Your argument was wrong (as I will show latter) but the point is that you defended him with this false MV argument against the charge of being a liquidationist. Here is essentially what you said:

Selgin: “He (Hayek) argued emphatically and consistently in 1932 and 1933 that it was necessary to maintain the level of spending by monetary policy, and it that regard there was no difference between him and Keynes. Although he did not want to start another boom he was also not someone who would say – let spending collapse”.

“The host: George (Selgin) would Hayek have supported QE?”
Selgin: In principle he would have” (and than quote Hayek to prove this point)”. Oooops.

Just as I said – you were staunchly defending Hayek against the charge that he was a “liquidationist”. And all the name calling, all “arguments” against me such as “liar”, “dishonest” etc cannot change that. They can only show most vividly what a liar YOU are.

Finally, as for MV stabilization thing, here is what Hayek had to say in Prices and Productiuon:
after the passage in which he says that THEORETICALLY MV stabilization would be nice he adds:

“…in order to eliminate all monetary influences on the formation of prices and the structure of production, it would not be sufficient merely quantitatively to adapt the supply of money to these changes in demand, it would be necessary also to see that it came into the hands of those who actually require it, i.e., to that part of the system where that change in business organization or the habits of payment had taken place. It is conceivable that this could be managed in the case of an increase of demand. It is clear that it would be still more difficult in the case of a reduction. But quite apart from this particular difficulty which, from the point of view of pure theory, may not prove insuperable, it should be clear that only to satisfy the legitimate demand for money in this sense, and otherwise to leave the amount of the circulation unchanged, can never be a practical maxim of currency policy”

Again, just I said – Hayek explicitly rejects your favored MV stabilization policy.

George Selgin August 15, 2011 at 1:48 pm

Nikolaj, try all you like to pretend otherwise, you dissemble. The video has me expressly calling Hayek a liquidationist both at the place I point out and during the longer segment to which you point. As for Hayek and stable MV, it has me saying that while Hayek might have favored QE “in principle,” he had no faith in central banks’ ability to achieve stable MV by means of it inpractice. Anyone who can find any inconsistency between what I said and the passge from Hayek that you quote must do so by reading something into one statement or the other that simply isn’t there.

This is my last intervention here. I’ve dealt with you more than I care to, and more than is worth my time.

Nicholas Wapshott August 15, 2011 at 6:38 pm

I know I have said this before, but the original real-life debate between Keynes and Hayek is far more interesting than Keynesians v Hayekians, who both inevitably simplify and mistranslate their professed masters. But you’ll have to wait until October before you can read my Keynes Hayek: The Clash That Defined Modern Economics. For a taster, try https://sites.google.com/site/wapshottkeyneshayek/

Nikolaj August 16, 2011 at 5:56 pm

It’s always funny to see a debater who has to change the meaning of the words in order to retain at least some plausibility of his thesis. So, now Hayek’s “liquidationism” meant “maintaining the level of spending by monetary policy” in which regard “there was not difference between him and Keynes”. So, poor Keynes was also a liquidationist without knowing it, at least as far as monetary policy goes! Why not? I cannot see the flaw. If you define “printing money and propping up the credit in order to avoid liquidation” as “liquidationism”, no miracle is out of reach.

The only problem is that this was not what Keynes meant by “liquidationism”, and that’s certainly not what Friedman thought by the term when he called “Prices and Production” a “very bad and harmful book because of its advocacy of doing nothing during the depression”. And that’s certainly not what Skidelsky meant when he called Hayek a “liquidationist” during the debate itself. All of them understood that liquidationism meant…well…liquidationism, i.e. “to let spending collapse” and do nothing, either through monetary or fiscal policy.

gilbert peralta October 18, 2011 at 8:48 am

You simply copy and paste the embedding code that youtube provides…

Jeffrey Tucker can figure it out, and he wears silly bow ties! :-)

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